NSW mining town disappointed at Coalpac rejection

The rejection of an extension of the Coalpac mine near Lithgow is another in a series of heavy blows to a small coal mining region.

The development application was rejected by the Department of Planning because its environmental impact, despite support from the Department of Treasury and Trade and Investment which was in favour of 150 direct jobs being created.

The mayor of Lithgow, Maree Statham, is disappointed.

She says Coalpac addressed issues like noise and air pollution, but the decision was influenced by several hundred submissions from environment groups from outside the area.

"I felt very comfortable that the decreased size of the mine and all the compliance (regulations) put on that mine would be a very good balance for the people of Cullen Bullen, the company and the environmental groups."

Some workers had already been laid off around Christmas and the company has now gone into voluntary administration.

"Now Cullen Bullen will miss out on the $5 million in royalty payments the company was going to distribute. It will miss out on the opportunity to have better facilities and sewerage."

It's another blow for the region that has already seen several major industries close down.

They include the Airly coal mine, which was closed last year, the private hospital, the Zig Zag railway - which was about to be re-opened but was burnt by the recent bushfires - cutbacks at the Simplot plant in nearby Bathurst and the imminent closure of the Electrolux factory.

There are also question marks about the future of the power plant.

However, Mayor Maree Statham believes that the area will survive and thrive.